New Zealand’s surging property market

New Zealand’s surging property market is a national crisis

PHOTO: NZ Property Market. FILE

OPINION PIECE – Property Noise Group

There is one simply reason why the Labour Government does not care about the rampant property market in New Zealand.

ANSWER: It is artificially propping up a COVID 19 economy

Tony Alexander puts his take on it –25 Reasons Why House Prices Are Rising – and Counting

Our take is this:

  1. Historically low interest rates – means you are paying more for your property purchase – means that seller spends those profits in part in the economy. It is simply Mortgage Money fueling the economy via property sales.
  2. NZ banks have been told to LEND LEND LEND –New mortgage commitments sky rocket | Reserve Bank
  3. Feel good. Own a property? Do not underestimate the SMUG FACTOR. The problem is – sell your property for 3 x  what you paid for it, and then start looking to replace that property. Not so SMUG now eh? All well and good if you are an investor cashing out though – but do we need to retain the percentage of rental stock in NZ.
  4.  The New Zealand Labour Government has SOLD out first homebuyers – to take the sting out of the impact of C0VID 19. They will show you the statistics and say plenty of first homebuyers are buying – and they are but they are borrowing $800k plus to do so? Good? In a rising property market sure, but when it comes back in price, what then?

There answer has been this:

There is 36% percent less $$$ circulating in our economy due to closed borders so lets artificially inflate house prices – so those sellers will spend parts of those profits to prop up the economy

Rising house prices – is the only tool in the shed that Jacinda Adern and her government are using to make us seem the the economy is ok

The real issue is – The Property Correction. It will come – it always does and those first home buyers that have a massive mortgage at 2. 49 percent now will one day face 6 – 7 – 8 percent plus mortgage rates. Not yet – but they will.

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